Beijing — Oil prices dipped on Wednesday amid a wider slump in financial markets and a strong dollar, while investors assessed the supply outlook.
Brent crude futures edged lower by 6c, or 0.1%, to $64.38 a barrel by 4.08am GMT, having touched a near two-week low in the previous session. US West Texas Intermediate (WTI) crude was down 10c, or 0.17%, at $60.46.
The risk-off tone across markets saw investors exit energy markets, ANZ analysts wrote in a Wednesday client note.
Asian stocks dived on Wednesday and market volatility reached levels not seen since April after an overnight tech-led sell-off on Wall Street put the spotlight on stretched valuations.
The US dollar index — which measures the currency against the euro and sterling, along with the yen and three other peers — was steady at a three-month high, buoyed by division among the Federal Reserve board, indicating low odds for an interest rate cut at the next policy meeting in December.
A stronger greenback makes dollar-denominated oil more expensive for holders of other currencies, which can impact demand. A US interest rate cut typically boosts demand.
“Crude oil is trading lower ... as risk sentiment shifted sharply negative, boosting the safe haven US dollar, both of which weighed on the crude oil price,” IG market analyst Tony Sycamore said in a note.
Prices were also under pressure as the American Petroleum Institute (API) said US crude stockpiles rose in the week ended October 31, sources said, citing the API figures on Tuesday.
Supply-side concern continued to weigh on prices. Oil cartel Opec and allied producers, known as Opec+, agreed on Sunday to increase output by 137,000 barrels a day (bbl/day) in December.
The group decided to pause further increases in the first quarter of 2026. However, the pause was “unlikely to offer meaningful support to November and December prices”, LSEG analysts said in a note.
Opec itself only added 30,000bbl/day to its output in October versus 330,000bbl/day the previous month as previously agreed Opec+ increases were offset by declines in Nigeria, Libya and Venezuela.
Reuters
